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Don't Stop Believing | SPX YE 3,600

Released on Thursday, August 20, 2020•STOCKS

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US equities have staged an impressive comeback from the March lows as they climbed their way out of bear market territory. The shift to decelerating Covid-19 cases has been the primary catalyst behind the recovery. However, the transition from rising to peak case counts did not come without economic pain, as the market recalibrated expectations to what we consider a worst-case scenario. Washington has reacted relatively quickly with unprecedented stimulus and a "Do whatever it takes" Federal Reserve policy response. The historic degree of stimulus, along with record-low interest rates, should provide valuation support as the market navigates around a turbulent earnings season. Based on this backdrop, Craig Johnson believes the pain trade has now flipped from down to up, as investors look ahead with optimism for reopening the US economy.

Craig Johnson

Piper Sandler & Co., Managing Director and Senior Technical Analyst

Craig Johnson, CFA, CMT is a managing director and chief market technician at Piper Sandler, directing the technical research group. Johnson joined Piper Sandler in 1995 as an analyst in the firm’s private client research. Mr. Johnson frequently shares his technical views on CNBC and other major financial news networks, and his research is often quoted in the financial press. He earned a bachelor’s degree with an emphasis in finance, marketing, insurance, and an MBA degree from Drake University. He holds the Chartered Financial Analyst™ and Chartered Market Technician designations and is an active member of the Twin Cities Society of Securities Analysts and co-chapter chair of the Minnesota Chapter Market Technician Association. Johnson is a former president of the CMT Association and currently leads the Technical Analysis Education Foundation (TAEF).